Qantas is again throwing in the towel on its Beijing route after finding itself facing weak premium demand and a surge in capacity from aggressive Chinese carriers.
The airline said it would cease flights from Sydney to Beijing from March 2020 after unsuccessfully trying to salvage the route by cutting frequencies from the daily to five per week.
Qantas returned to Beijing in 2017 but said competitor capacity between the Chinese capital and Australia had grown by 20 percent since then and is expected to increase further in 2020.
The airline pointedly noted that this was the reverse of the overall trend of declining international capacity into Australia.
Chinese carriers are offering the kinds of fares normally associated with low-cost carriers: Air China if currently advertising return economy fares from Sydney and Melbourne to Beijing for $A530.
The Australian carrier will redeploy the Airbus A330 used on the Beijing route to existing destinations in Asia and funnel its customers through partner airlines such as China Eastern, Cathay Pacific and Cathay Dragon.
It will retain its Shanghai route on its existing schedule, saying it continues to perform well.
“Our flights to Beijing have been underperforming for some time due to weaker demand as well as a big increase in capacity from other airlines,” Qantas International chief executive Tino La Spina said in a statement
“China is a significant market for Qantas and our direct services from and to Shanghai are performing well. With Beijing, we’re responding to what the market is telling us.”
“We’ve got a strong partnership with China Eastern, so Qantas customers will be able to travel with them between Australia and Beijing and be rewarded as they would when flying with us.”
Qantas has made several attempts to crack the Beijing market but has retreated in each case. It complained after axing its previous attempt that it was possible to fill an aircraft flying from Beijing and still lose money.
The Qantas move comes after Virgin Australia announced it would axe its financially-embattled Melbourne Hong Kong route and concentrate on its service from Sydney.